Understanding the main points. Decide whether the following statements are true or false.
Decide whether the following statements are true or false.
1. The top management have to make strategic decisions which
determine the future of the company. T/F
2. Marks and Spencer’s mission and purpose was to provide
money and goods of excellent quality to customers. T/F
3. The American Telephone and Telegraph Company decided to
perform well because it wanted to be nationalized. T/F
4. Objectives are the results or targets that management thinks
are desirable. T/F
5. Before deciding strategies, the planners have to look at the
company’s internal and external factors which might affect
its future. T/F
Vocabulary focus
1. Find words or phrases in the text which mean the same as the following:
1. done as a part of a plan to achieve a particular purpose (paragraph 1)
………………………………………………………………………..
2. a business that sells goods to members of the public (paragraph 3)
………………………………………………………………………..
3. a company whose shares are freely sold and traded (paragraph 3)
………………………………………………………………………..
4. a person or organization that buys products or services (paragraph 4)
…………………………………………………………………………
5. the percentage of sales in a market that a company has (paragraph 5)
…………………………………………………………………………
6. a plan for achieving an aim, especially relating to the best way for
an organization to develop (paragraph 5)
………………………………………………………………………….
7. a particular quality or ability that gives someone an advantage in
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relation to others (paragraph 6)
…………………………………………………………………………..
8. lack of a particular characteristic that would give you the ability to
succeed (paragraph 6)
…………………………………………………………………………..
9. an increase in size, amount or degree (paragraph 7)
…………………………………………………………………………..
LANGUAGE STUDY
1. Complete the following sentences with suitable phrasal verbs:
carry out
work out
pull out
break into
draw up
1. It often has to ……………….. of the market.
2. You ……………….. a strategy which will enable you to improve your
performance in the market.
3. You usually ……………….. a contract with the agents.
4. You can ……………….. a market study to find out if potential customers
will buy the product.
5. You can try to ……………….. an overseas market.
2. Complete the following passage with the correct form of the words below.
strategy
skill
delegate
right
planning
innovative
venture
drawback
trust
personnel
expertise
segment
finance
set up
The problems of small high-tech firms have attracted a lot of attention recently. Research shows that many of these firms are ……………….. (1) by talented, creative scientists. Their owners have no trouble coming up with …………….. (2) products but they often can’t build on their early success.
One reason for this is that they don’t have much management ……………….. (3). Therefore, they are unable to develop the ……………….. (4) which are necessary for their company’s growth. They are in a rush to develop products, and don’t think enough about how to market them. When they do try to sell their products, they spend too much time trying to gain the ……………….. (5) of potential customers. Another mistake they make is to underprice their products so that they have no ……………….. (6) for future development.
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Once the firms begin to grow, their owners underestimate the future costs of developing and marketing new products. Lack of financial ……………….. (7) is a major weakness of such companies. It is difficult for the high-tech firm to attract the right ……………….. (8) because it cannot offer the same job security as a large organization.
The high-tech firm can get round some of these problems by developing a specialist image. It can aim at a particular ……………….. (9) of the market. Customers then start seeking out the firm, so its marketing costs are reduced. The only ……………….. (10) is that it may take some time before customers accept the firm’s new technology.
As soon as the high-tech business has reached a certain size, it will be a good idea to bring in professional management. The founder of the firm can then ……………….. (11) responsibility for activities like marketing and finance. If a high-tech firm needs money very badly, it may arrange a link-up with a larger company. It will offer that company exclusive ……………….. (12) to its technology.
Enthusiasm, bright ideas, ……………….. (13) capital and technology are not enough to ensure success. Basic management ……………….. (14) – especially financial and marketing ones – are also vital.
4. Rewrite the following sentences without changing their meaning. Use the verbs
or phrases in italics followed by the correct prepositions and make any other
necessary changes.
e.g. We think you ought to change your pricing policy.
suggest
|
We suggest | changing |
your pricing policy |
| (that) you change | ||
| (that) you should change |
1. We always try to give good service to our customers.
make a point
…………………………………………………………………………………..
2. “I’m delighted you have kept within your budget,” said the Chairman to our
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Advertising Manager.
congratulate
……………………………………………………………………………………
3. The Managing Director said, ”The new product must be launched by January”.
insist
…………………………………………………………………………………
4. Marks and Spencer are making a special effort to sell fashionable clothes for
young people.
concentrate
…………………………………………………………………………………
5. We are pleased when our customers are satisfied.
take pleasure
…………………………………………………………………………………..
6. The owner doesn’t want to sell the business at the moment.
interested
…………………………………………………………………………………
7. I don’t agree with our Chief Executive when he says we should expand the
range of our products.
wrong
…………………………………………………………………………………..
8. We are considering breaking into new markets.
think
…………………………………………………………………………………..
9. He is sure that the bank will lend him the money for future development.
depend
…………………………………………………………………………………..
10.Marks and Spencer have always been able to forecast accurately what their
customers want.
succeed
…………………………………………………………………………………..
5. Look at the mission statements of three companies:
1. To make sports cars for discerning enthusiasts with good technical knowledge.
2. To sell clothing more cheaply than the department stores.
3. To sell electrical goods with a high level of after-sales service.
Which strategy from the list below does each company correspond to?
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a) cost leadership:offering products or services at the lowest cost; this is one
strategy to adopt in volume industries where competitors produce large numbers
of similar products.
b) differentiation:offering products or services that give added value in terms of
quality or service compared to competitors
c) focus:using one of the above two strategies to concentrate on a niche, a specific
part of the market with particular needs
6. Choose some companies or service organizations that you know well. Then, in
each case, discuss:
a) what the objectives of each business are;
b) what strategies the management are using to achieve their objectives.
Are all the businesses using the right strategies?
If not, what changes should they make?
7. Work individually or in groups of two or three.
Give a short oral presentation of any organization you are familiar with.
Try to point out its strengths, weaknesses, opportunities and threats (SWOT).
Talk about its objectives and strategies, and say what you think its future
Prospects are.
| UNIT 6 GOAL-SETTING |
DISCUSSION
Read the following conversation and then discuss the questions which follow.
Jack Macdonald is Sales Manager of a leather goods company. Brenda Cole is a sales representative. Each January, Jack writes a report on her work performance during the previous year and discusses it with her. Below is an extract from one such meeting.
M: I’ve said in my report that I’m fairly happy with your work, Brenda. I set you a
sales target of $150,000. And, in fact, you had sales of roughly $118,000 – a
reasonable effort on the whole.
C: Thanks. I’d have liked to have reached my target, but to be honest, I never
thought I had much chance.
M: Really? You didn’t say anything when we set the target last year. How come?
C: Oh, I didn’t want to sound too gloomy, I suppose. No one else was
complaining, so why should I? I didn’t want to rock the boat.
M: Mm, I see. Still, results are what count here, and yours are quite good, I
suppose. There are one or two things I’d like to mention, though.
C: Uh huh?
M: About the way you dress for work. One of our customers mentioned it. He said
you looked rather … er … casual when you last visited him. It seems you were
dressed in jeans and a jumper. That’s no good for our image, surely?
C: Oh … er … no. I did dress casually once or twice, when I visited a customer on
a Saturday morning. But usually …
M: All right. But don’t let it happen again, will you?
C: Of course not.
M: Another thing. I’ve noticed there are quite a few slow payers among your
customers. Can’t you do something about that?
C: I could chase them up a bit. Put some pressure on them.
M: Do that. You’re expected to get on to slow payers, you know, and find out
what’s going on. Don’t you ever read your job description?
C: Job description? I haven’t looked at it for years. And I bet no one else has
around here either.
M: You may be right. But it’s no excuse. You know perfectly well, Brenda, that
I set the highest standards for all my sales staff. And I expect you to meet them.
Right?
C: Yes, O.K.
1. How well do you think Macdonald dealt with this part of the discussion?
Explain your answer, with examples.
2. If you were Brenda Cole, what would you have said to make the discussion
more effective?
READING
Management by Objectives (MBO) is a system which was first described by the American Peter Drucker, in 1954, in his book The Practice of Management. Since then, MBO has attracted enormous interest from the business world, and its principles have been applied in many of the world’s largest companies.
In his book, Peter Drucker emphasized that an organization and its staff must have clear goals. Each individual must understand the goals of the enterprise he/she works for, and must make a contribution to them. It is also vital, in Drucker’s view, that the individual knows what his/her manager expects of him/her. He/she must know what sort of results he/she is expected to achieve.
If an organization uses the Management by Objectives approach, it must pay careful attention to planning. This is because each individual has clearly defined objectives. And these will contribute to the overall objectives of the enterprise. With MBO, individual and organization objectives are linked. A special feature of MBO is that the subordinate participates with his/her manager in developing objectives. After these have been worked out, his/her performance, in relation to the goals, can be assessed. MBO, therefore, focuses on results. The subordinate’s performance is judged in terms of how well or badly he/she has achieved his/her goals.
Various kinds of MBO systems are used in organizations. Here is an example of how a programme might work in a company:
The programme consists of several stages. First, the subordinate’s job is defined. Next, his/her current performance is evaluated. Then, new objectives are developed by the subordinate and his/her manager. Finally, the programme is put into action. Later, there are periodic reviews of the person’s performance, and his/her progress is checked.
Let us consider these phases in more detail. At the first stage, the subordinate and his/her manager define the job separately. They also rank the tasks in order of importance. Both parties then meet and discuss the statements they have made in writing. It is quite possible that they will not agree about certain aspects of the job. They discuss their differences of opinion. In the end, they both have a clearer idea of what the job involves.
At stage two, the subordinate and his/her manager examine each task. They try to decide how well or badly it is being performed. Again, they do this evaluation separately. They meet and discuss their assessments. All being well, the manager will have the chance to praise the subordinate for some of his/her work. On the other hand, the subordinate or the manager – or even both parties – may point out areas where there are problems – tasks which are not performed properly.
Developing objectives comes next. The subordinate and his/her manager try to develop goals which are challenging but realistic. The manager may set performance standards which can be measured or quantified. But this is not essential. The objectives probably spell out results that must be achieved. There will be dates by which the subordinate must achieve his/her goals.
In the table below, Figure 1, you can see examples of objectives for an MBO programme.
Figure 1
| SUBORDINATE | OBJECTIVES |
| Sales representative | Increase sales of video-recorders in the Chicago area by 5%, by 1 June. Obtain five new accounts by 1 January. Send sales reports in on time. |
| Chief Accountant | Reduce bad debts from 8% to 4% of sales turnover by 1 January. Introduce new computer systems in Accounts Department by 1 January. |
| Marketing Manager | Complete test marketing of PX hi-fi units by 1 January. Increase market share of home computers by 3% by 1 January. |
| Production Manager | Meet 90% of all delivery dates. Reduce cost of bought-in materials by 5%. Reduce the number of units rejected by quality control. Increase number of quality control circles meeting each month. All goals to be achieved by 1 January. |
| Personnel Manager | Complete training programme for shop-floor workers by 1 January. Present bonus scheme for Board approval by 1 June. Make suggestions for improved selection procedures by 1 June. |
The subordinate and the manager discuss the objectives and make plans for achieving them. The manager may have to help in some way, perhaps by providing more training for the subordinate or buying more modern machines.
Finally, the subordinate sets about achieving the goals. From time to time, the subordinate and the manager meet to discuss progress. It is vital that the manager receives feedback from the subordinate on performance and achievements. (The documents used for the last two stages of the MBO programme are shown in Figure 2).
Figure 2
| GOALS SHEET | ||
| Name: David Jeffries Position: Research and Development Manager Date: 5 January, 1988 | ||
| Goals for the current year | Goals for the next year | Performance Indicator |
| Design, develop and produce a prototype of product BLP-2 within a budget of $500,000 Complete modifications to Antisneez | Attract more money from government agencies to develop new products Re-launch Antisneez by September | Prototype of product BLP-2 by the end of the year Achieve sales of $50,000 by year end |
| PERFORMANCE EVALUATION | ||
| Name: David Jeffries Position: Research and Development Manager Date: 5 January, 1989 | ||
| Goals for the current year | Goals for last year | Results achieved |
| Attract more money from government agencies to develop new products | Design, develop and produce a prototype of product BLP-2 within a budget of $500,000 | Prototype of product BLP-2 produced by the end of October at a cost of $450,000 |
| ACHIEVEMENT | ||||
| Unsatisfactory □ | Fair □ | Good □ | Very good □ | Outstanding ∎ |
There are many benefits of Management by Objectives. The system helps the subordinate to see clearly his/her role in the organization and the tasks he/she must carry out. He/She has a say in how his/her job is performed, and what his/her goals should be. As a result he/she feels more responsible and motivated and is therefore likely to be more committed to the objectives of the organization.
MBO is a good technique for assessing an individual’s performance. He/She is judged on results, rather than on the personal feelings or prejudices of the manager. An MBO programme should lead to better coordination and communications within an enterprise. The subordinate must liaise closely with his/her manager. The manager acts as teacher and guide. The individual is encouraged to identify with the goals of the organization. Most important of all, MBO makes the individual think of results, of the contribution he/she is making – or should make – to the enterprise. The main limitations of the system are that it is time-consuming and may create a lot of paperwork. In practice, MBO programmes are often not fully supported by managements. This could be because managers are not always skilled at interviewing and giving guidance.
A few years ago, it was discovered that 70% of the 500 biggest companies in the USA were using MBO. However, a later survey showed that only 15% of the programmes were considered successful. In spite of this finding, there is little doubt that MBO has helped to increase the efficiency of both subordinates and their managers.
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